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Farming

FUW puts spotlight on rural economy

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FUWHOW MANY businesses are involved in the running of a farm and how many people are directly and indirectly employed by the agricultural sector?

How reliant is the rural community really on farming? Those were the questions the Farmers’ Union of Wales asked recently.

We often think about the obvious options, such as feed merchants, sales and auctioneers businesses, farm contractors etc. but how much does just one farm really contribute?

To try and answer these questions Mid Wales farmers John Yeomans, his wife Sarah and son Joe, recently hosted an event that put the spotlight on the importance of agriculture in the rural economy, at their farm Llwyn y Brain, Adfa, near Newtown.

A survey of the businesses that the Yeomans family deal with revealed 2,347 jobs at local and Welsh level and also 225,980 at a wider national level were dependent on the survival of those businesses.

On the farm, the Yeomans family run a herd of 73 cows consisting of pedigree Limousin, Limousin x, Belgian Blue x, and 15 homebred replacement heifers (closed herd).

They further keep 495 ewes which are mainly Beulah and 160 Beulah ewe lambs and the flock has been closed since 1981.

The couple sell Beulah draft ewes and some yearlings, as well as Welsh Mule ewe lambs for breeding and sell finished lambs on a deadweight basis

The 232 acres of owned farmland sit between 750 feet to 1420 above sea level, with 100 acres (34.8ha) of lower land and 132 acres (53.4ha) of largely improved hill land.

A further 53 acres of additional land is rented.

John, who was keen to explore the wider economic impact his business has on the wider rural economy, said: “Following the downturn in agriculture over recent times and across almost all sectors, I wanted to help highlight the importance of a thriving agricultural sector on the economy – both locally and much further afield.

“Farmers are an exceptional conduit for money, so if their businesses are thriving they reinvest and this, in turn, brings wealth and good fortune to others.

“The difficult times we are facing are clearly already impacting on our ancillary and support industries and businesses.

“With this in mind, we were pleased to put the spotlight on all the businesses – both local and further afield – that have some stake in our survival. Our relationship with these businesses is symbiotic and crucial to both our successes.”

BUSINESSES

ANSWER THE CALL

The event was attended by an array of local businesses and representatives such as Agri-Advisor, Agrimin, Bibby’s, Alpha Plumbers, FUW Insurance Services Ltd., E W Bumford & Co, RVW Pugh Ltd, I Jerman, Binding Tyre Services, Countrywide, Westflight, Morris Marshall and Poole, British Wool Marketing Board, Wynnstay, R G and G R Francis, McCartneys, OPICO, Sainsbury’s, Genus, KiwiKit, Dunbia, E George & Son, Dow AgroSciences, Trefaldwyn Vets, Zoetis, Shearwell Data and HSBC, who play a role in John and Sarah’s daily business routine.

Mr Yeomans said: “I must thank the businesses who came to support the event and those that responded to our short survey for the valuable contribution they make to our business and the wider rural economy.

“Supermarkets and slaughterhouses are just as important in our business as our local garage.

“Over 22% of the employment in Wales is linked to farming or food in some way, so it is worth noting the important role we all play in keeping our economic powerhouse going.

“Individually we may not be making a fortune for our solicitor, bank, garage or anything else. But together we are an important force.

“We hope days like this will help to get the message across about the connection between British food and the many businesses connected to it, why it is worth supporting your local farmer and how much of a difference each individual can make in terms of giving back to the local economy.”

THE ELECTRICAL WHOLESALER

City Electrical Factors (CEF) are one of the businesses the Yeomans family trade with. C.E.F. are a national Electrical Wholesaler supplying businesses the length and breadth of the UK.

The Newtown and Welshpool branches sit in the heart of Mid-Wales and as such are two of the most rural branches in the C.E.F. network.

Across these two branches the company employs 11 staff, and nationally they employ about 2750 members of staff.

Darryl Owen, manager of the two branches, said: “I feel it’s very important to employ local people to serve local people. Many of my staff have strong links to the local agricultural and Farming community.

“For us, in such a rural area, any downturn in agriculture has a serious knock on effect to our business and turnover in Newtown and Welshpool.

“It is not just the direct effect from farming businesses but indirectly through the Electrical Contractors who serve this market sector. We service a very wide and diverse market sector which can all be affected by any downturn in the Farming community.

“Many small industries in Mid- Wales are reliant on a strong agricultural customer base. If these small business begin to struggle they stop spending and that’s a big issue for us.

“The on-going success of C.E.F. in Mid-Wales is undoubtedly linked to the success of our agricultural community. Any effort or campaign that will highlight the importance of a healthy rural economy will definitely have my support.”

MACHINERY SALES

RVW Pugh Ltd, an agricultural machinery dealership that specialise in the sales and aftersales of tractors and farm machinery to the agricultural industry, have their head office in Mellington, Mid Wales.

They have two further depots in Holmes Chapel, Cheshire and Market Drayton, Shropshire.

The company employs 54 employees over the three depots, with 35 of them employed at the head office in Mellington.

Robert Pugh, Managing Director, said: “Agriculture is the backbone of our business, more than 95% of our customers are farmers/contractors. We are obviously feeling the knock on effect of farmers struggling with commodity and produce prices, along with late receipt of single farm payments… at the moment we are owed £1.5m from creditors which fall outside of our 30 day credit terms.

“This obviously puts pressure on our business and holds up cash flow which we could use to further improve and invest in our business during these difficult times.”

AGRICULTURE THE

WELSH POWERHOUSE

Glyn Roberts, FUW President, who attended the event, said: “All the businesses that make the wheel of our rural economy go round have an important role to play in our daily lives and indeed how we all survive and make a living.

“We know that a lot of second and third sector businesses are already struggling as a result of the knock on impact of low agricultural incomes and farmgate prices, and the potential wider impact if there was to be a further downturn in farm incomes could be catastrophic.

“We must remember that agriculture is the powerhouse of the rural economy, generates billions of pounds which benefit a host of industries including many not directly associated with agriculture – something that is clear to see here – today-.

“The impact of the most recent recession on our economy as a whole has been severe, but there can be no doubt that in rural Britain and many of our urban areas the impact has been buffered by the core role agriculture has played in generating income for communities the length and breadth of the UK.

“With this in mind – we as the Farmers’ Union of Wales – will continue to represent and fight for those who make a living off the land and through that, support those second and third sector industries- as we have done since 1955 – in Cardiff, London and Brussels.”

FUW Montgomeryshire County Chairman, Mark Williams, added: “We were keen to explore in more detail how our rural economic powerhouse is sustained by individual farm businesses.

“You’ve got your farm and the people who might be employed on it, whether that is family or external contractors, but it is also about the feed merchants, contractors, machinery dealers, local garages, supermarkets, farm shops, auctioneers, banks and solicitors– all of the businesses that are involved either in a direct or indirect capacity.

“The message going back to consumers across the UK has to be ‘Support your local farmer – Support a thriving rural economy’.”

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Farming

Warning to dog owners following recent attacks on livestock

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POLICE and Crime Commissioner Dafydd Llywelyn has issued a warning to dog owners that they face being prosecuted if they fail to keep their dogs under control when out walking the country side.

His warning comes following reports of several recent incidents whereby livestock have been attacked or killed by dogs in rural parts across the Dyfed-Powys Force area.

As a result of the recent incidents and the ever increasing concerns within local Farming Communities, Police and Crime Commissioner Dafydd Llywelyn has moved swiftly to organise a meeting with NFU representatives and the Dyfed-Powys Rural Crime team which will take place on 11 January 2021.

Police and Crime Commissioner Dafydd Llywelyn said; “This is a critical time in the rural community as farmers go into the lambing season, and in light of these recent, concerning incidents, I will be meeting with NFU representatives and our Rural Crime Team in the Force to identify ways of working collaboratively to tackle the problem.

“Dog owners need to take responsibility for ensuring dogs are kept under control while out walking the country side, especially as we enter the lambing season.

“They may think it is fun to run around animals in fields, but this is not the case and these animals often get scared, injured or killed as a result.

“We are grateful to the majority of responsible dog walkers in our communities, but we want to remind all owners that dogs should be kept on leads at all times around livestock – it is an offence to allow your pet to worry, kill or maul sheep, their lambs, or any other livestock”.

PC Esther Davies of Dyfed-Powys Police Rural Crime Team said; “Since the Rural Crime Team was formed some two and half years ago, we have received regular reports of livestock worrying throughout the force. These are incidents that occur throughout the year and can have a devastating effect on farmers and rural communities.

“Dog owners must take responsibility for their dogs and ensure that they are kept under control at all times. If dogs are being walked be it on the road, through a field or on a footpath, and especially somewhere where there is likely to be livestock, they should always be kept on leads. Incidents like this can and should be avoided.”

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Farming

NFU Cymru President’s New Year message

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NFU Cymru President John Davies provides his New Year message, looking back over an unprecedented 12 months and assessing what lies ahead in 2021.

 

“2020 was a year the likes of which we’ve never seen. The Coronavirus pandemic has challenged all of society. My condolences go out to all of those who’ve lost loved ones to this disease. My thoughts are with all whose livelihoods have been affected by the knock-on effects that the pandemic has had on businesses and our general way of life. I’d like to place on record my heartfelt thanks to our NHS workers and those supporting them on the front line for their courage in tackling this global health emergency. So often the term ‘hero’ is attached to those in films or on the sporting stage, but if this year has taught us anything it’s that, in fact, the real heroes are those people in our communities who have gone to work – putting themselves at risk – to care for the sick and keep the rest of us safe. Diolch yn fawr iawn pawb.

“The initial impact of the Covid-19 outbreak and the overnight closure of the hospitality sector had severe consequences for the food supply chain. The resilience of those systems was stretched to the limit as the supply chain frantically sought to redirect produce that would usually be destined for the out-of-home market to the retail sector, where panic-buying had resulted in empty shelves in many stores. I thank all our farmers who have worked throughout the chaos of the Covid-19 fallout to keep the nation fed. I know that for many businesses and sectors this hasn’t always been easy and some experienced significant losses as those supply chains struggled to adapt to new demands. However, the role the entire industry has played during such a fraught period will live long in the memory of many, and indeed recent polls suggests farmers’ favourability with the consumer is higher than it has been in a decade.

“I very much hope that lessons can be learned from this tumultuous year and if the past few months have taught us anything, it’s that the safe, reliable supply of high quality affordable food is now of paramount importance to the public. As farmers we are ready and committed to ensuring that the nation remains fed during this difficult time and through future challenges, too. Our farming systems, underpinned by a fantastic, natural asset base, mean we are well equipped to be the providers of the most climate friendly food in the world. NFU Cymru will continue to lobby Welsh Government to see the importance of food production recognised and protected as a cornerstone of future policy.

“Looking ahead and, with significant changes to how Wales and the UK trades with the EU and the rest of the world, one of the biggest challenges for 2021 is going to be making sure that Welsh farmers have the widest possible range of markets freely open to them, on the best possible terms. We are, of course, relieved that that a deal has finally been agreed between the UK and the European Union, providing some much-needed certainty for the farming sector and allowing Wales’ farmers to continue to send products to the EU27 free of both tariffs and quotas. All efforts must be now be focussed on finding ways of minimising the impact of red tape on the movement of our produce to the EU.

“A heartfelt thanks must go to the one million people from all walks of life who backed our food standards campaign. Their support was instrumental in delivering legislation to ensure that food standards will now have a ‘stronger voice in UK trade policy’.

“Of course, away from the pandemic and agricultural policy, there are still major issues that are affecting the nation’s farmers every day. Bovine TB continues to blight so many businesses across Wales – all too many times this year I have again learned of families’ heartbreak and herds, generations in the making, being decimated due to this horrific disease. Please be assured that NFU Cymru will continue to pressure government to act upon the science and take notice of the proven strategies adopted by so many other countries – an approach that seeks to tackle bovine TB across all its vectors.

“NFU Cymru maintains that a heavy-handed and inflexible approach to water quality through the proposed all Wales Nitrate Vulnerable Zone (NVZ) designation will not deliver the enhancements to water quality that we all want to see. NFU Cymru is committed to helping to deliver these improvements via an effective and proportionate framework that supports farmers to take action to improve water quality where it is needed. I am heartened that our Minister has recognised that these are not regulations to introduce at a time of crisis.

“Climate change remains a major challenge for all of us in society and the farming industry is putting its best foot forward to deliver on its net zero 2040 ambition. With the prestigious COP26 summit rescheduled to be held in Glasgow in 2021, it is clear this topic will, rightly, remain high on the news agenda next year. As a farmer, it’s important to me that farming’s contribution to mitigating the effects of climate change is fairly reflected in this debate. Recent research has pointed to the fact that Welsh livestock production systems are amongst the most sustainable in the world, but we know that there is much more we can and will do.

“With a Senedd election scheduled for May 2021 we will be speaking to candidates from across the political spectrum to push home the importance of Welsh food and farming. We are committed to working with the next government to deliver our ambitions for a productive, profitable and progressive farming sector that delivers for the people and communities of Wales.

“It has been a year like no other. With the vaccine rollout now underway I hope we will soon be able to consign the last pandemic-hit year to the history books and return to some form of normality, where we can soon meet at the agricultural shows and events that we all hold dear to our heart. Let us look ahead to 2021 and what we hope will be a bright, healthy and safe future.

“Blwyddyn Newydd dda.”

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Farming

Farmers face hidden tax hike

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POTENTIAL changes to rules on Capital Gains Tax could lead to a tax hike for those inheriting farmland and assets, financial advisers at NFU Mutual have warned.

Many farmers can potentially pass on farms to their children free from Inheritance Tax due to Agricultural Property Relief and Business Property Relief.

As capital gains are wiped away on death, children inheriting can sell and only face Capital Gains Tax on any rise in value between the date of death and a sale.

However, in a review ordered by Chancellor Rishi Sunak, the Office of Tax Simplification has recommended that gains should no longer be wiped away on death where the estate has claimed Agricultural or Business Property relief to reduce Inheritance tax.

Sean McCann, Chartered Financial Planner at NFU Mutual, said: “Many farmers choose to hold on to their farming assets until death on the basis that not only might they be free of Inheritance tax, but also escape Capital Gains Tax if sold shortly after death.

“The Office of Tax Simplification’s recommendation that gains should no longer be wiped on death where Agricultural or Business Property relief has been claimed to reduce inheritance tax will mean bigger tax bills for some farming families.

“The biggest impact will be on those who sell farming assets they’ve recently inherited. Those that retain the assets and continue to farm won’t face any immediate tax liability under the proposed changes.

“The Office of Tax Simplification also recommended a hike in Capital Gains Tax rates that would align them to Income Tax rates, leading to larger tax bills.

“However, it’s likely that any change would be accompanied by an allowance to take account of the rise in value caused by general inflation, so any tax is only levied on ‘real’ gains.

“It’s important to stress Rishi Sunak has not yet confirmed he will agree to these recommendations, but many farming families will be watching the March Budget with interest.”

[INSET BOX]

EXAMPLE

A farmer owns a farm worth £1m which he bought 25 years ago for £300,000. He dies and leaves it to his children, who sell for £1m shortly after his death. Under current rules, if he met the criteria for 100% Agricultural and Business Property relief, they would pay no inheritance tax on the £1m and no Capital Gains Tax on the sale.

Under the proposal to abolish the tax-free update on death, while there would still be no inheritance tax due – if the farmer’s children sold shortly after his death, they would face a Capital Gains Tax bill on the £700,000 gain. Based on the existing rate (20%) that would trigger a Capital Gains Tax bill of £140,000.

“It’s important to stress Rishi Sunak has not yet confirmed he will agree to these recommendations, but many farming families will be watching the March Budget with interest.”

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